Friday, January 07, 2011
India -: Asia’s other economic powerhouse
India: Asia’s other economic powerhouse
ANDY HOFFMAN — ASIA-PACIFIC REPORTER
Published The Globe and Mail Thursday, Dec. 30, 2010
India’s problems are obvious and enormous: crushing poverty, persistent corruption scandals and a crumbling infrastructure that is decades out of date.
At first blush, India’s economic virtues are less apparent, but they are tremendously compelling, particularly over the long term.
As China’s roaring economy has been the pacesetter for recovery from the global financial crisis, the world’s most populated country has garnered the bulk of international attention. From its undervalued currency to its mushrooming modern super-cities to its yawning trade surplus with the United States, China has dominated the attention of the world’s financial markets this year.
Yet 2011 may finally be the year when people wake up to the potential of the other Asian economic superpower.
India currently enjoys three major economic attributes that China lacks: democracy, favourable demographics and a preponderance of English speakers, which helps ease business dealings with the West. In 2011, these advantages could begin to bloom.
As Raghav Bahl, the founder and controlling shareholder of Network 18, India’s largest television news and business network, argues forcefully in his new book Superpower? The Amazing Race Between China’s Hare and India’s Tortoise, India has the mettle and resources needed to eventually close the economic gap with its powerful north-eastern neighbour.
For starters, Mr. Bhal notes, India is a democracy, the world’s largest, in fact. Compare that with China, where 24 members of the Central Politburo are tasked with charting the course for a nation of 1.3 billion people. The primary driver of much of China’s social, political, fiscal and monetary policy is preventing social unrest and keeping the Communist Party of China in power. Although admittedly flawed, India’s democratic system aims to elect representatives that will draft the best policies for the people and the country, not the political party they belong to.
As international objections to India’s nuclear weapons program have diminished, world leaders have begun flocking to India for diplomatic visits that are far less politically charged than missions to Beijing. India’s Parliament in New Delhi, currently led by Manmohan Singh, who was the architect of India’s key financial reforms in the 1990s, is now a must-visit location for global dignitaries.
In just the past two months, Prime Minister Singh has entertained U.S. President Barack Obama, French President Nicolas Sarkozy, China’s Premier Wen Jiabao and, most recently, Russian President Dmitry Medvedev. Reinforcing India’s rising political and economic might, Mr. Singh has also visited Japan and Germany this year, rounding out his country’s engagement with most of the world’s major economies.
The Indian Prime Minister even found the time to come to Ottawa this year following Stephen Harper’s first trip to India in November, 2009.
Although Canada has yet to sign a free-trade agreement with any Asian countries (including South Korea and Singapore, where talks have dragged on for years), it began negotiations with India in November. If realized, Mr. Harper’s government has said a free-trade agreement between Canada and India could be worth $6-billion a year for each country. (Despite Canada boasting more than one million residents of South Asian descent, two-way trade with India was just $4.2-billion in 2009. Trade with China was about $50.5-billion.)
India also has demographics on its side. It will soon dwarf the rest of the world when it comes to its working age population – people between 18 and 65 who are contributing members of society. Compared to North America, Japan and even China, India is an exceptionally young country. The majority of its population is less than 30 years old and by 2020 the average age will be 29, compared to 45 in Western Europe and 48 in Japan, according to a recent report from the Canadian International Council.
China’s one-child policy has contributed to an aging population. Unless radical changes are made, China’s work force growth will end by 2030, and, like much of the rest of the world, the burden of looking after retirees will soar.
In just nine years, by 2020, the United States could be short 17 million people of working age, China 10 million, Japan nine million and Russia six million. At the same time, India will have a surplus of 47 million workers. If India can achieve the massive task of improving health care and educational services for these workers, it is sure to become an economic powerhouse.
While much has been made of China’s burgeoning consumer class, India is already endowed with a hefty middle class whose size has been estimated at about 200 million people – the entire population of Brazil.
India also enjoys an abundance of English speakers, a fact that could help facilitate more business and trade with the West, whose companies and politicians have often struggled with cultural and language challenges in China.
India represents the largest English-speaking ethnic community in the world, with about 350 million Indians displaying a reasonable proficiency in the language. Moving beyond its troubling colonial roots, English has become the language of upward mobility in India, used by cab drivers, university professors, lawyers and in business. Eighty per cent of India’s two million college graduates are English-speaking.
Despite the myriad of challenges faced by its 1.1 billion people, India is expected to record the second fastest growth of the world’s major economies in 2010, expanding by 9.7 per cent, according to the IMF. (China’s economy will grow by 10.5 per cent, the IMF says.) In the third quarter, India’s economy grew by a more-than-expected 8.9 per cent, with household spending and investment driving the expansion. According to London-based Capital Economics, India’s economic upswing will stay in good shape over the coming year.
“The structural development story is overwhelmingly positive and the government in the end will deliver on the reforms needed to ensure that the private sector continues to thrive,” Vishnu Varathan, the firm’s Asia economist, said in a recent report.
India’s government has finally come up with a plan to tackle its woeful infrastructure deficit, which Prime Minister Singh has said is choking economic growth. Government investment in roads, ports and rail could hit $500-billion (U.S.) for the five years ending in March, 2012. In the following five years, the prime minister hopes to invest another $1-trillion dollars in infrastructure with half the funds coming from the private sector.
Still, the headlines in India’s vibrant newspapers (both in Hindi and English) are currently dominated by corruption scandals involving several officials both in the public and private sectors, including the telecom minister, Andimuthu Raja, who resigned amid allegations related to wireless spectrum sales and has denied any wrongdoing. But the very fact that the corruption scandals have brought public censure is cause for optimism, according to analysts at Hong Kong’s GaveKal-Dragonomics, who say that India’s banks may present an opportunity when compared to China’s massive state-controlled lenders.
“Although India’s public banks also have guidelines forcing them to lend to priority sectors, Indian banks are clearly more mature, and more accustomed to dealing with marketplace realities,” the research and advisory firm said in a note to clients.
“And the recent loan-for-bribe scandals should improve conditions, as they demonstrate that there is now a penalty for corruption.”
http://www.theglobeandmail.com/report-on-business/economy/india-asias-other-economic-powerhouse/article1853707/page1/
My comments posted in the site: "How to tackle India’s problems of enormous crushing poverty, persistent corruption scandals and crumbling infrastructure"?:
Introduce Random, Anonymous, Secured Encrypted Unique Identity (UID) Number and a Multi Purpose Biometric Smart Card linked to a single money account as Debit Card for every citizen on a war footing and demonetize currency. Track anonymously all transactions and in the event of any corruption charge, make the transactions public.
Biometric Smart Card based transactions could be the magic wand to transform India through eradication of corruption from the system and ensure security of food, health, housing, education, employment and social security for all. We can see a developed India in 5 years.
ANDY HOFFMAN — ASIA-PACIFIC REPORTER
Published The Globe and Mail Thursday, Dec. 30, 2010
India’s problems are obvious and enormous: crushing poverty, persistent corruption scandals and a crumbling infrastructure that is decades out of date.
At first blush, India’s economic virtues are less apparent, but they are tremendously compelling, particularly over the long term.
As China’s roaring economy has been the pacesetter for recovery from the global financial crisis, the world’s most populated country has garnered the bulk of international attention. From its undervalued currency to its mushrooming modern super-cities to its yawning trade surplus with the United States, China has dominated the attention of the world’s financial markets this year.
Yet 2011 may finally be the year when people wake up to the potential of the other Asian economic superpower.
India currently enjoys three major economic attributes that China lacks: democracy, favourable demographics and a preponderance of English speakers, which helps ease business dealings with the West. In 2011, these advantages could begin to bloom.
As Raghav Bahl, the founder and controlling shareholder of Network 18, India’s largest television news and business network, argues forcefully in his new book Superpower? The Amazing Race Between China’s Hare and India’s Tortoise, India has the mettle and resources needed to eventually close the economic gap with its powerful north-eastern neighbour.
For starters, Mr. Bhal notes, India is a democracy, the world’s largest, in fact. Compare that with China, where 24 members of the Central Politburo are tasked with charting the course for a nation of 1.3 billion people. The primary driver of much of China’s social, political, fiscal and monetary policy is preventing social unrest and keeping the Communist Party of China in power. Although admittedly flawed, India’s democratic system aims to elect representatives that will draft the best policies for the people and the country, not the political party they belong to.
As international objections to India’s nuclear weapons program have diminished, world leaders have begun flocking to India for diplomatic visits that are far less politically charged than missions to Beijing. India’s Parliament in New Delhi, currently led by Manmohan Singh, who was the architect of India’s key financial reforms in the 1990s, is now a must-visit location for global dignitaries.
In just the past two months, Prime Minister Singh has entertained U.S. President Barack Obama, French President Nicolas Sarkozy, China’s Premier Wen Jiabao and, most recently, Russian President Dmitry Medvedev. Reinforcing India’s rising political and economic might, Mr. Singh has also visited Japan and Germany this year, rounding out his country’s engagement with most of the world’s major economies.
The Indian Prime Minister even found the time to come to Ottawa this year following Stephen Harper’s first trip to India in November, 2009.
Although Canada has yet to sign a free-trade agreement with any Asian countries (including South Korea and Singapore, where talks have dragged on for years), it began negotiations with India in November. If realized, Mr. Harper’s government has said a free-trade agreement between Canada and India could be worth $6-billion a year for each country. (Despite Canada boasting more than one million residents of South Asian descent, two-way trade with India was just $4.2-billion in 2009. Trade with China was about $50.5-billion.)
India also has demographics on its side. It will soon dwarf the rest of the world when it comes to its working age population – people between 18 and 65 who are contributing members of society. Compared to North America, Japan and even China, India is an exceptionally young country. The majority of its population is less than 30 years old and by 2020 the average age will be 29, compared to 45 in Western Europe and 48 in Japan, according to a recent report from the Canadian International Council.
China’s one-child policy has contributed to an aging population. Unless radical changes are made, China’s work force growth will end by 2030, and, like much of the rest of the world, the burden of looking after retirees will soar.
In just nine years, by 2020, the United States could be short 17 million people of working age, China 10 million, Japan nine million and Russia six million. At the same time, India will have a surplus of 47 million workers. If India can achieve the massive task of improving health care and educational services for these workers, it is sure to become an economic powerhouse.
While much has been made of China’s burgeoning consumer class, India is already endowed with a hefty middle class whose size has been estimated at about 200 million people – the entire population of Brazil.
India also enjoys an abundance of English speakers, a fact that could help facilitate more business and trade with the West, whose companies and politicians have often struggled with cultural and language challenges in China.
India represents the largest English-speaking ethnic community in the world, with about 350 million Indians displaying a reasonable proficiency in the language. Moving beyond its troubling colonial roots, English has become the language of upward mobility in India, used by cab drivers, university professors, lawyers and in business. Eighty per cent of India’s two million college graduates are English-speaking.
Despite the myriad of challenges faced by its 1.1 billion people, India is expected to record the second fastest growth of the world’s major economies in 2010, expanding by 9.7 per cent, according to the IMF. (China’s economy will grow by 10.5 per cent, the IMF says.) In the third quarter, India’s economy grew by a more-than-expected 8.9 per cent, with household spending and investment driving the expansion. According to London-based Capital Economics, India’s economic upswing will stay in good shape over the coming year.
“The structural development story is overwhelmingly positive and the government in the end will deliver on the reforms needed to ensure that the private sector continues to thrive,” Vishnu Varathan, the firm’s Asia economist, said in a recent report.
India’s government has finally come up with a plan to tackle its woeful infrastructure deficit, which Prime Minister Singh has said is choking economic growth. Government investment in roads, ports and rail could hit $500-billion (U.S.) for the five years ending in March, 2012. In the following five years, the prime minister hopes to invest another $1-trillion dollars in infrastructure with half the funds coming from the private sector.
Still, the headlines in India’s vibrant newspapers (both in Hindi and English) are currently dominated by corruption scandals involving several officials both in the public and private sectors, including the telecom minister, Andimuthu Raja, who resigned amid allegations related to wireless spectrum sales and has denied any wrongdoing. But the very fact that the corruption scandals have brought public censure is cause for optimism, according to analysts at Hong Kong’s GaveKal-Dragonomics, who say that India’s banks may present an opportunity when compared to China’s massive state-controlled lenders.
“Although India’s public banks also have guidelines forcing them to lend to priority sectors, Indian banks are clearly more mature, and more accustomed to dealing with marketplace realities,” the research and advisory firm said in a note to clients.
“And the recent loan-for-bribe scandals should improve conditions, as they demonstrate that there is now a penalty for corruption.”
http://www.theglobeandmail.com/report-on-business/economy/india-asias-other-economic-powerhouse/article1853707/page1/
My comments posted in the site: "How to tackle India’s problems of enormous crushing poverty, persistent corruption scandals and crumbling infrastructure"?:
Introduce Random, Anonymous, Secured Encrypted Unique Identity (UID) Number and a Multi Purpose Biometric Smart Card linked to a single money account as Debit Card for every citizen on a war footing and demonetize currency. Track anonymously all transactions and in the event of any corruption charge, make the transactions public.
Biometric Smart Card based transactions could be the magic wand to transform India through eradication of corruption from the system and ensure security of food, health, housing, education, employment and social security for all. We can see a developed India in 5 years.
Labels: Asia, Biometric Smart Card, corruption, economic powerhouse, education, health care, India, Poverty Alleviation, scandals, social security, Unique Identity Scheme
Tuesday, March 23, 2010
Delivery of services through Panchayats
Making RSBY or NREGA or any other welfare scheme of the GoI or State Governments to work successfully for the benefit of the citizens is not easy because it is not citizen centric and mired in corrupt practices.
There is resistance of people to pay Rs. 30.00 to get a RSBY card for a family of five, as they feel it would be another waste of their money, mainly to benefit others (TPAs, Insurance Companies, Registered Hospitals, etc).
It is observed, whenever individuals or organizations or government or public sector employees claim medical reimbursement, invariably hospitals inflate the rates and charge high fees, saying, after all the reimbursement is from other agencies and why the patient should bother. There is no fixed service fees. Invariably patients are admitted and many unwanted high cost tests / scans are under take to fleece to the maximum.
It is time, there is a cap on the limit of money a hospital can take subject to rendering genuine service. This where the catch is. Who is to judge what is a genuine service?
Instead of a card for a family, RSBY should be integrated with UID Smart card for every citizen from birth to death and proper tracking needs to be included. Every citizen should get uniform good service. It should not be, you name the person, I shall tell you the type of treatment we extend.
One example that of Cancer Institute, Chennai, a non-profit, mainly charity organization. Here the Doctors are de-linked from the Administration. There is only 2 categories - payment and free categories. If the monthly earnings of an individual or family is above rs. 1,000, then it is payment. Else it is totally free. The payment is same, irrespective of if the patient is rich or poor. The treatment is also the same, irrespective of if you are rich or poor. There has been no instance of visible corruption or favoritism in treatment.
In many villages, the Village Nurse would give importance, only if the family is politically connected or is rich enough to influence the community leaders. The health registers and stock of medicines are not updated even for years and there is no system of checking!!
Invariably, the PRIs are steeped in corruption. The only way we can make people get truly benefited is to de-link the service providers and service seekers. Introduce Multi Purpose Biometric Smart Card cum Bank Debit Card based transaction mandatory and track all transactions for transparency and accountability. Eliminate the cancer of corruption, through a major surgery, if we want the benefits to genuinely reach the poorest of the poor. No cosmetic change can improve the systems.
This may sound extremely negative; but unfortunately that is the fact of the matter. Unfortunately, most Service Providers including NGOs prefer to fish in troubled waters and keep the water agitated and deny the common man their rightful dues, so that they can survive! That is how the rich are getting richer and the poor are getting poorer and the gap is widening day by day. Apparently some benefits are shown to reach the poor. But at what cost to the nation is not seen,as electoral aims have come to play a major role and are seen to be more important than citizen welfare in a democracy!!
The above was in response to a post in UNDP Solutions Exchange - Decentralization Community discussions (se-decn@solutionexchange-un.net.in) as follows:
"We are currently engaged in providing civil society partnerships to state governments in the Rashtriya Swasthya Bima Yojana (RSBY) scheme (www.rsby.in) launched in April 2009. It is a smart-card based health insurance system.
There are numerous cases where Below Poverty Line (BPL) families have been financially wiped out because of a health related catastrophe, such as an accident, a problem pregnancy, or any other severe medical condition. While universal access to healthcare is the responsibility of the government and is the desired scenario, in the absence of the same, affordable health insurance for all assumes even greater importance. Health insurance is one way of providing protection to poor households against the risk of health spending leading to perpetual poverty. The objective of the scheme is to protect BPL households from major health-shocks that involve hospitalization. RSBY is currently the most inclusive and comprehensive national health insurance scheme, especially for a section of society for whom quality healthcare forever seemed out of reach. At a one-time enrolment fee of merely Rs 30/-, the scheme provides coverage to five members of the family, up to an annual total coverage of Rs 30,000. The scheme covers most serious illnesses and procedures that require hospitalization.
The scheme is currently running in 22 states and some states are entering its second phase. However, given the vastness of the country and the levels of literacy in the country, the utilization of the scheme has not been as much as desired. Even if enrollment is satisfactory, beneficiary utilization is not necessarily optimal. In a population with relatively low literacy and poor understanding of healthcare processes, the beneficiaries lack the support and guidance to utilize the benefits of this unique scheme to their maximum advantage.
It is also important to note that many of the components coming under the broad premise of primary health care like family welfare, health and sanitation, women and child development, social welfare, including welfare of the handicapped and mentally retarded etc and poverty alleviation programmes are subjects transferred to rural local governments as per the Eleventh Schedule of Article 243 G of 73rd Amendment to the Constitution of India, though the actual situation might vary from State to State.
Members may also note that the Union Budget 2010-2011 has announced that the Rashtriya Swasthya Bima Yojana (RSBY) benefits would be extended to all such Mahatma Gandhi NREGA beneficiaries who have worked for more than 15 days during the preceding financial year. This is also important as Panchayats play a major role in the implementation of NREGS.
In this context, we request inputs from members on the following:
· What are the special institutions, systems, etc which are needed at the village and block levels to increase utilization of such RSBY by BPL population?
· Could you share experiences in awareness generation and increased utilization of RSBY or similar schemes among the identified population by PRIs?
· Is there a need for building any specific capacity/capability in the PRIs for improving utilization of RSBY among the BPL population and other NREGS beneficiaries with the aid of PRIs? Recommended and/or proven strategies for the same would be invaluable".
There is resistance of people to pay Rs. 30.00 to get a RSBY card for a family of five, as they feel it would be another waste of their money, mainly to benefit others (TPAs, Insurance Companies, Registered Hospitals, etc).
It is observed, whenever individuals or organizations or government or public sector employees claim medical reimbursement, invariably hospitals inflate the rates and charge high fees, saying, after all the reimbursement is from other agencies and why the patient should bother. There is no fixed service fees. Invariably patients are admitted and many unwanted high cost tests / scans are under take to fleece to the maximum.
It is time, there is a cap on the limit of money a hospital can take subject to rendering genuine service. This where the catch is. Who is to judge what is a genuine service?
Instead of a card for a family, RSBY should be integrated with UID Smart card for every citizen from birth to death and proper tracking needs to be included. Every citizen should get uniform good service. It should not be, you name the person, I shall tell you the type of treatment we extend.
One example that of Cancer Institute, Chennai, a non-profit, mainly charity organization. Here the Doctors are de-linked from the Administration. There is only 2 categories - payment and free categories. If the monthly earnings of an individual or family is above rs. 1,000, then it is payment. Else it is totally free. The payment is same, irrespective of if the patient is rich or poor. The treatment is also the same, irrespective of if you are rich or poor. There has been no instance of visible corruption or favoritism in treatment.
In many villages, the Village Nurse would give importance, only if the family is politically connected or is rich enough to influence the community leaders. The health registers and stock of medicines are not updated even for years and there is no system of checking!!
Invariably, the PRIs are steeped in corruption. The only way we can make people get truly benefited is to de-link the service providers and service seekers. Introduce Multi Purpose Biometric Smart Card cum Bank Debit Card based transaction mandatory and track all transactions for transparency and accountability. Eliminate the cancer of corruption, through a major surgery, if we want the benefits to genuinely reach the poorest of the poor. No cosmetic change can improve the systems.
This may sound extremely negative; but unfortunately that is the fact of the matter. Unfortunately, most Service Providers including NGOs prefer to fish in troubled waters and keep the water agitated and deny the common man their rightful dues, so that they can survive! That is how the rich are getting richer and the poor are getting poorer and the gap is widening day by day. Apparently some benefits are shown to reach the poor. But at what cost to the nation is not seen,as electoral aims have come to play a major role and are seen to be more important than citizen welfare in a democracy!!
The above was in response to a post in UNDP Solutions Exchange - Decentralization Community discussions (se-decn@solutionexchange-un.net.in) as follows:
"We are currently engaged in providing civil society partnerships to state governments in the Rashtriya Swasthya Bima Yojana (RSBY) scheme (www.rsby.in) launched in April 2009. It is a smart-card based health insurance system.
There are numerous cases where Below Poverty Line (BPL) families have been financially wiped out because of a health related catastrophe, such as an accident, a problem pregnancy, or any other severe medical condition. While universal access to healthcare is the responsibility of the government and is the desired scenario, in the absence of the same, affordable health insurance for all assumes even greater importance. Health insurance is one way of providing protection to poor households against the risk of health spending leading to perpetual poverty. The objective of the scheme is to protect BPL households from major health-shocks that involve hospitalization. RSBY is currently the most inclusive and comprehensive national health insurance scheme, especially for a section of society for whom quality healthcare forever seemed out of reach. At a one-time enrolment fee of merely Rs 30/-, the scheme provides coverage to five members of the family, up to an annual total coverage of Rs 30,000. The scheme covers most serious illnesses and procedures that require hospitalization.
The scheme is currently running in 22 states and some states are entering its second phase. However, given the vastness of the country and the levels of literacy in the country, the utilization of the scheme has not been as much as desired. Even if enrollment is satisfactory, beneficiary utilization is not necessarily optimal. In a population with relatively low literacy and poor understanding of healthcare processes, the beneficiaries lack the support and guidance to utilize the benefits of this unique scheme to their maximum advantage.
It is also important to note that many of the components coming under the broad premise of primary health care like family welfare, health and sanitation, women and child development, social welfare, including welfare of the handicapped and mentally retarded etc and poverty alleviation programmes are subjects transferred to rural local governments as per the Eleventh Schedule of Article 243 G of 73rd Amendment to the Constitution of India, though the actual situation might vary from State to State.
Members may also note that the Union Budget 2010-2011 has announced that the Rashtriya Swasthya Bima Yojana (RSBY) benefits would be extended to all such Mahatma Gandhi NREGA beneficiaries who have worked for more than 15 days during the preceding financial year. This is also important as Panchayats play a major role in the implementation of NREGS.
In this context, we request inputs from members on the following:
· What are the special institutions, systems, etc which are needed at the village and block levels to increase utilization of such RSBY by BPL population?
· Could you share experiences in awareness generation and increased utilization of RSBY or similar schemes among the identified population by PRIs?
· Is there a need for building any specific capacity/capability in the PRIs for improving utilization of RSBY among the BPL population and other NREGS beneficiaries with the aid of PRIs? Recommended and/or proven strategies for the same would be invaluable".
Labels: accountability, Decentralization Community, health care, medical insurance, NREGS, PRIs, RSBY, Solutions Exchange, transparency, UNDP
